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Aimmune Therapeutics Announces Third Quarter 2017 Financial Results and Planned Retirement of CEO by the End of 2018

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Aimmune Therapeutics, Inc. (NASDAQ:AIMT), a biopharmaceutical company
developing treatments for life-threatening food allergies, today
announced financial results for the quarter and nine months ended
September 30, 2017. As of September 30, 2017, cash, cash equivalents,
and investments totaled $212.0 million.

Aimmune also announced that CEO Stephen Dilly, M.B.B.S., Ph.D., plans to
retire by the end of 2018. Aimmune will initiate a search for a
successor CEO to lead the Company as it builds towards the potential
commercial launch of its lead investigational product, AR101, which is
currently in Phase 3 development for the treatment of peanut allergy.
Dr. Dilly will continue as Aimmune's CEO until his replacement joins the
company and will be available through a transition period.

"My decision to retire is based solely on my personal desire to have
more time for my family, especially my eldest son, who has special
needs," said Dr. Dilly. "We are announcing this now in order to
facilitate an orderly executive search and transition period, and I
remain completely committed to continuing to lead Aimmune through the
exciting events ahead. We are looking forward to the completion of our
pivotal Phase 3 PALISADE trial around year-end and sharing top-line data
in the first quarter of 2018."

"We continue to execute well on all fronts. In the third quarter, we
were very pleased to announce a Phase 2 clinical collaboration with
Regeneron and Sanofi that will explore the potential of AR101 and
adjunctive dupilumab to achieve sustained unresponsiveness to peanut,"
continued Dr. Dilly. "In addition, we are making solid progress in
RAMSES, ARTEMIS, and ARC004, three additional trials that will support
our regulatory submissions for AR101 at the end of 2018. We are also on
track to file an IND for our egg CODIT program in 2018. Financially, we
continue to be in a strong position to support our planned development
activities through regulatory submissions of AR101."

"Based on what Aimmune has accomplished, the board and management are
grateful for the tremendous contributions Stephen has made. We respect
his very personal decision and appreciate the fact that his deep and
sustained commitment allows us to spearhead a fulsome search for the
right next CEO of Aimmune, an individual with significant commercial and
strategic experience, to build upon what Stephen and the team have
delivered to date. We have never been more excited about Aimmune's
potential, and will work deliberately to identify and land our next
leader while the team led by Stephen maintains focus on our 2017 and
2018 objectives," added Mark McDade, Chairman of the Board.

Recent Corporate Highlights

Announced Phase 2 Clinical Collaboration with Regeneron/Sanofi. In
October, Aimmune announced a clinical collaboration with Regeneron and
its strategic alliance collaborator Sanofi to study AR101 treatment with
adjunctive dupilumab in peanut-allergic patients in a Phase 2 clinical
trial. Regeneron will sponsor the trial, with Aimmune to provide
clinical supply of AR101 and food challenge materials. The clinical
collaboration will include the formation of an Aimmune–Regeneron/Sanofi
Joint Development Committee.

The planned Phase 2 clinical trial is expected to begin in 2018 with a
proposed primary endpoint of tolerating a certain dose of peanut protein
in a double-blind, placebo-controlled food challenge (DBPCFC) that will
include doses matching and exceeding those being tested in current AR101
studies. The study also includes a proposed exploration of sustained
unresponsiveness after discontinuation of therapy in another DBPCFC.
Sustained unresponsiveness is achieved when, after a break in treatment,
peanut-allergic patients are able to tolerate a defined amount of peanut
protein with no more than mild allergic symptoms.

Published ARC001 Phase 2 Results in Peer-Reviewed Journal. In
October, Aimmune announced the publication of results from its Phase 2
ARC001 trial of AR101 in The Journal of Allergy and Clinical
Immunology: In Practice
1. This was the first
peer-reviewed publication of efficacy and safety of an
industry-sponsored food allergy trial. The ARC001 study demonstrated
that approximately six months of AR101 treatment significantly raised
the level of tolerance of peanut protein, compared to placebo.

The observed differences in response rate between AR101 and placebo
groups on the Intent-to-Treat (ITT) analysis were 60 percent for the
300-mg endpoint (95% CI 34-87%) and 62 percent for the 600-mg endpoint
(95% CI 37-87%). The lower bound of the 95% confidence interval on the
ARC001 ITT analysis greatly exceeded the minimally clinically meaningful
difference of 15 percent agreed to with the Food and Drug Administration
(FDA) for the Phase 3 PALISADE study primary endpoint. Consistent with
the known mechanisms of oral immunotherapy, transient allergic symptoms
occurred in nearly all AR101 subjects, with 96 percent of those symptoms
being mild, not dose-limiting, and not requiring medical intervention.
No adverse events were graded as severe. Gastrointestinal symptoms were
the most common treatment-related adverse events in both the AR101 and
the placebo subjects.

Announced Publication of Clinical Data Demonstrating the Potential of
AR101 to Reduce Peanut-Specific T
H2 Cells. In
August, Aimmune announced that AR101 was featured in a publication by
Benaroya Research Institute in the August 2 issue of Science
Translational Medicine
2 focused on the discovery of an
immune cell subset — TH2A cells – that appears to be involved
in the pathogenesis of allergies. These allergen-specific T cells are
present in people with allergies but nearly entirely absent from people
without allergies.

In a small pilot experiment, AR101 treatment was associated with a
statistically significant reduction of TH2A cells in blood
samples from a subset of peanut-allergic patients from Aimmune's ARC001
trial. Specifically, patients receiving AR101 experienced statistically
significant reductions in TH2A cells, whereas there was no
reduction in TH2A cells in patients receiving placebo. These TH2A
cell reductions appeared to be associated with clinical response.

Upcoming Milestones

Completion of PALISADE Around Year-End 2017; Top-Line Data in First
Quarter 2018.
Aimmune expects that the last double-blind,
placebo-controlled food challenge (DBPCFC) in its Phase 3 PALISADE trial
of AR101 will be conducted in December 2017 and that top-line data will
be available in the first quarter of 2018.

There are two statistical analysis plans: one is designed to support a
Biologics License Application (BLA) with the U.S. Food and Drug
Administration (FDA), and the other to support a Marketing Authorization
Application (MAA) with the European Medicines Agency (EMA). The primary
endpoint for the BLA is the proportion of subjects ages 4–17 who
tolerate a single highest dose of at least 600 mg in the exit DBPCFC
after six months of maintenance therapy. As part of the statistical
analysis plan's requirements for success as agreed with the FDA, the
study must demonstrate at least a 15 percent superiority margin of the
AR101 arm over the placebo arm; the study is powered greater than 90
percent to detect this difference. Tolerating single highest doses of at
least 300 mg and 1,000 mg are secondary endpoints for the BLA. The
primary endpoint for the MAA is the proportion of subjects ages 4–17 who
tolerate a single highest dose of at least 1,000 mg. There is no
requirement to demonstrate a 15 percent margin of superiority for the
MAA. Tolerating single highest doses of at least 300 mg and 600 mg are
secondary endpoints for the MAA.

Third Quarter Financial Results

For the quarter and nine months ended September 30, 2017, net loss was
$31.8 million and $90.2 million, respectively, compared to net loss of
$22.1 million and $55.7 million for the comparable periods of 2016.

On a per share basis, net loss for the quarter and nine months ended
September 30, 2017, was $0.63 and $1.79, respectively, compared to net
loss per share of $0.53 and $1.33 for the comparable periods of 2016.
The weighted average shares outstanding for each of the quarter and nine
months ended September 30, 2017 were 50.5 million and 50.3 million
shares, respectively, compared to 42.0 million and 41.8 million shares
for the comparable periods in 2016.

Research and development expenses for the quarter and nine months ended
September 30, 2017, were $21.1 million and $60.7 million, respectively,
compared to $15.9 million and $37.7 million for the comparable periods
in 2016. The increase was primarily due to the development of AR101,
including progression of the PALISADE trial, enrollment of patients in
the open-label follow-on study of PALISADE (ARC004) and the real-life
RAMSES trial, and contract manufacturing costs.

General and administrative expenses for the quarter and nine months
ended September 30, 2017, were $11.2 million and $31.0 million,
respectively, compared to $6.4 million and $18.5 million for the
comparable periods in 2016. The increase was primarily due to additional
employee-related costs, including stock-based compensation expense, and
external professional services as Aimmune continues to build the
infrastructure to support the development and potential
commercialization of AR101.

Cash, cash equivalents, and investments totaled $212.0 million at
September 30, 2017, compared to $282.5 million at December 31, 2016. The
decrease primarily reflects cash used in operations.

About Aimmune Therapeutics

Aimmune Therapeutics, Inc., is a clinical-stage biopharmaceutical
company developing treatments for life-threatening food allergies. The
company's Characterized Oral Desensitization ImmunoTherapy (CODIT™)
approach is intended to achieve meaningful levels of protection by
desensitizing patients with defined, precise amounts of key allergens.
Aimmune's first investigational biologic product using CODIT™, AR101 for
the treatment of peanut allergy, has received the FDA's Breakthrough
Therapy Designation for the desensitization of peanut-allergic patients
4-17 years of age and is currently being evaluated in Phase 3 clinical
trials. For more information, please see www.aimmune.com.

References

1. JA Bird et al. (2017) Efficacy and safety of AR101 in oral
immunotherapy for peanut allergy: results of ARC001, a randomized,
double-blind, placebo-controlled Phase 2 clinical trial. Journal of
Allergy and Clinical Immunology: In Practice
.

DOI: http://dx.doi.org/10.1016/j.jaip.2017.09.016.

2. E Wambre et al. (2017) A phenotypically and functionally
distinct human TH2 cell subpopulation is associated with
allergic disorders. Science Translational Medicine.

DOI: http://dx.doi.org/10.1126/scitranslmed.aam9171.

Forward-Looking Statements

Statements contained in this press release regarding matters that are
not historical facts are "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Because such
statements are subject to risks and uncertainties, actual results may
differ materially from those expressed or implied by such
forward-looking statements. Such statements include, but are not limited
to, statements regarding: Aimmune's expectations for its Phase 3
PALISADE trial of AR101, including that final study visits will be
completed around year-end 2017 and that topline data for the trial will
be available in the first quarter of 2018; Aimmune's expectation that it
will recruit and hire a new chief executive officer by the end of 2018;
Aimmune's expectation that it will file regulatory approval applications
for AR101 by the end of 2018; Aimmune's expectations that it will file
an IND for its egg allergy program by the end of 2018; Aimmune's
expectations for its RAMSES, ARTEMIS and ARC004 trials of AR101;
Aimmune's expectations regarding the anticipated timing of any future
clinical trials, including the Phase 2 clinical trial to be sponsored by
Regeneron and Sanofi; Aimmune's expectations regarding the potential
benefits of AR101, including in combination with dupilumab; Aimmune's
expectations regarding the sufficiency of its capital resources; and
Aimmune's expectations regarding potential applications of the CODIT™
approach to treating life-threatening food allergies. Risks and
uncertainties that contribute to the uncertain nature of the
forward-looking statements include: the expectation that Aimmune will
need additional funds to finance its operations; Aimmune's or any of its
collaborative partners' ability to initiate and/or complete clinical
trials; the unpredictability of the regulatory process; the possibility
that Aimmune's or any of its collaborative partners' clinical trials
will not be successful; Aimmune's dependence on the success of AR101;
Aimmune's reliance on third parties for the manufacture of its product
candidates; and possible regulatory developments in the United States
and foreign countries. These and other risks and uncertainties are
described more fully in Aimmune's most recent filings with the
Securities and Exchange Commission, including its Quarterly Report on
Form 10-Q for the quarter ended September 30, 2017. All forward-looking
statements contained in this press release speak only as of the date on
which they were made. Aimmune undertakes no obligation to update such
statements to reflect events that occur or circumstances that exist
after the date on which they were made.

This press release concerns a product that is under clinical
investigation and that has not yet been approved for marketing by the
U.S. Food and Drug Administration (FDA) or the European Medicines Agency
(EMA). It is currently limited to investigational use, and no
representation is made as to its safety or effectiveness for the
purposes for which it is being investigated.

 
AIMMUNE THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

 

  September 30,    

 

2017

December 31,

(Unaudited)

2016 (1)

Assets
Cash and cash equivalents $ 73,821 $ 124,010
Short-term investments 138,209 124,921
Prepaid expenses and other current assets   6,063   2,749
Total current assets 218,093 251,680
Long-term investments 33,602
Property and equipment, net 14,940 10,391
Prepaid expenses and other assets   637   3,116
Total assets $ 233,670 $ 298,789
 
Liabilities and Stockholders' Equity
Current liabilities $ 21,187 $ 11,450
Other liabilities 1,894 1,367
Stockholders' equity   210,589   285,972
Total liabilities and stockholders' equity $ 233,670 $ 298,789
 
(1) Derived from the audited financial statements,
included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2016.
 
 
AIMMUNE THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
 
  Quarter Ended   Nine Months Ended
September 30, September 30,
2017   2016 2017   2016
Operating Expenses
Research and development(1) $ 21,063 $ 15,888 $ 60,671 $ 37,684
General and administrative(1)   11,226   6,353   30,963   18,542
Total operating expenses   32,289   22,241   91,634   56,226
Loss from operations (32,289 ) (22,241 ) (91,634 ) (56,226 )
Interest income, net   497   155   1,475   478
Net loss $ (31,792 ) $ (22,086 ) $ (90,159 ) $ (55,748 )
 
Net loss per common share, basic and diluted $ (0.63 ) $ (0.53 ) $ (1.79 ) $ (1.33 )
Shares used in computing net loss per common share, basic and diluted 50,458 41,997 50,254 41,831
               
(1) Includes stock-based compensation expenses of:
Quarter Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Research and development $ 1,305 $ 1,493 $ 3,482 $ 3,710
General and administrative   2,774   1,995   8,389   5,383
Total stock-based compensation expenses $ 4,079 $ 3,488 $ 11,871 $ 9,093
 

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